RPX, Defensive Patent Firm, Goes from Zero to $160M IPO in Less than Three Years—Thoughts from Boston Investor CRV
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big companies and startups alike, who want to avoid getting sued, or at least cut their losses. (For example, mobile startups Dashwire and Vlingo have cut patent-licensing deals with Intellectual Ventures in the past year.)
“RPX is like an insurance play,” says Izhar Armony, a partner at Charles River Ventures who led that firm’s investment. “It has catapulted itself to a leadership position.” Vis-à-vis Intellectual Ventures—in which CRV is also a big investor—Armony thinks the dynamic has similarities to what happened with Oracle and Salesforce.com over the last decade. Salesforce was co-founded by a former Oracle exec, and the two firms have had competing yet complementary approaches.
“Salesforce did not kill Oracle, it actually made Oracle more competitive,” Armony says.
The bottom line on today’s IPO for Charles River and its co-investors should be a good one, although they haven’t disclosed how much money they put into RPX. “I think we’ll have an EqualLogic-scale exit here,” Armony says. EqualLogic, a data storage firm, was bought by Dell for $1.4 billion in 2007, after raising more than $50 million from venture investors (including CRV). So, not bad for less than three years of work on RPX.
RPX being a public company should also be helpful for observers trying to sort out what’s going on with all the patent-protection companies that are popping up. Perhaps this IPO will bring some much-needed transparency to the fast-moving field of tech intellectual property rights.